EXHIBIT 10.25


 


EMPLOYMENT AGREEMENT


 


This Agreement is made between Robert J. Ferguson (“FERGUSON”) and
Heron Lake BioEnergy, LLC (“HLBE”) a Minnesota Company organized under the laws
of Minnesota, whose principal place of business is Heron Lake, Minnesota. The
headings contained in this Agreement are for convenience only, have no legal
significance and are not intended to change or limit this agreement in any
matter whatsoever.


 


a.                                      HLBE is engaged in the
business of production of ethanol and distills grain from corn and is in the
need for a Chief Executive Officer.


 


b.                                     FERGUSON desires employment
as the Chief Executive Officer and has the skills, knowledge and experience
necessary to perform this job.


 


1.                                      EMPLOYMENT


 


HLBE hereby agrees to employ FERGUSON as its Chief
Executive Officer, and FERGUSON hereby accepts and agrees to such employment
subject to the general supervision and pursuant to the orders, advice  and direction of
the HLBE Board of Governors. FERGUSON shall perform such
duties as are customarily performed by one holding this position and shall
devote  his time and effort to HLBE business.


 


2.                                      BEST EFFORTS OF EMPLOYEE


 


FERGUSON agrees that he will at all times faithfully,
industriously, and to the best of ability, experience and talents, perform all
of the duties that may be required from him pursuant to the terms hereof, to
the reasonable satisfaction of HLBE. Such duties shall be rendered at the
office/plant of HLBE Heron Lake, MN and it various  business
locations as required, as well as at such other place or places as HLBE shall
in good faith require or as the interests, needs, business, or opportunities of
the HLBE shall require.


 


3.                                      TERM &  TERMINATION


 


FERGUSON agrees to serve  as Chief
Executive  Officer to HLBE for a period of one year commencing
on September 1, 2007 to September 1, 2008, OR earlier of the date on
which FERGUSON ceases to provide services  to HLBE under this Agreement.
Either party may terminate this Agreement at any time upon (30) days written
notice unless termination is related to unsatisfactory performance or for cause
for which no notice is required.


 


4.                                      COMPENSATION


 


FERGUSON shall be compensated at the rate of $120,000
per year for the term of this employment agreement and compensated a
proportionate share of his annual salary on a bi-weekly basis as agreed upon by
FERGUSON and HLBE. In the event  the Board of Governors  of HLBE declares
a bonus for the employees of HLBE, FERGUSON shall share in the bonus at the
discretion of the HLBE Board of Governors.


 





















 


5.                                      OTHER BENEFITS


 


In addition to the compensation stated in paragraph
four (4) above, HLBE shall provide FERGUSON with all benefits provided to
its employees. FERGUSON shall immediately have available one-hundred sixty
(160) hours of paid time off to be used at his discretion and upon approval by
the Board of Governors. In addition, FERGUSON’s annual accrual rate using his
hire date of September 1, 2007 will be equivalent to one-hundred sixty
(160) hours.


 


6.                                      CONFIDENTIAL/TV AGREEMENT


 


FERGUSON understands that, in the course of his
employment, HLBE will make Confidential Information of HLBE available to him
and provide access to such information, and instruct him in the use thereof,
and will place him in personal contact with customers and potential customers
of HLBE. FERGUSON understands that he is entering into a confidential
relationship with HLBE under which he assumes a common law duty not to use or
disclose HLBE’s confidential information to the determent of HLBE.


 


FERGUSON agrees that during his employment, he will not
remove any HLBE documents and materials from the business premises of HLBE or
deliver any HLBE documents and materials to any person or entity outside HLBE,
except as he is required to do in connection with performing the duties of his
employment. FERGUSON further agrees that, upon the termination of employment by
either FERGUSON or by HLBE for any reason, that FERGUSON will immediately
return to HLBE all lists, notes, records, forms and documents relating to the
business of HLBE, and all property belonging to or provided to him by HLBE that
may be in his possession. FERGUSON shall sign, HLBE’s “Mutual Confidentiality
Agreement” with HLBE on or prior to October 15, 2007. See Exhibit “A”


 


All HLBE documents and materials are and shall be the
sole property of HLBE.


 


7.                                      NON COMPETE AGREEMENT


 


(a)                                  During the term of FERGUSON’S employment and for one (1) year
thereafter, FERGUSON will not encourage or solicit any employee of HLBE to
leave HLBE for any reason or to accept employment with any other company. As part
of this restriction, FERGUSON will not interview or provide any input to any
third party regarding any such person during the period in question.


 


(b)                                 During the term of his employment hereunder and for a period
of twelve (12) months following termination, FERGUSON shall not, directly or
indirectly:


 


1.                                       Call upon or solicit, including electronic or on-line any
customer of HLBE upon which FERGUSON called on behalf of the HLBE or which was
serviced during the term of his employment within a twelve (12) month period
immediately preceding his termination of employment.


 


2.                                       Call upon or solicit, any prospective customer of HLBE to
which sales development activity was devoted by the office of HLBE in which 


 





















 


FERGUSON was employed within a twelve
(12) month period immediately preceding his termination of employment.


 


8.                                      TRADE SECRETS


 


FERGUSON agrees not to disclose any trade secrets
belonging to HLBE, except as is required in his capacity as Chief Executive
Officer and when FERGUSON reasonably believes it is in the best interest of
HLBE to do so. FERGUSON hereby acknowledges that any information about the
business of the HLBE is confidential and to be kept secret, unless it is
published or made publically known outside the HLBE in an authorized manner.


 


As used herein, “trade secrets” shall include, but
not be limited to, any documents, drawings or any other materials involving,
recording or consisting of formulas, compounds, compositions, business plans,
business methods, financial information, computer programs, machines,
inventions, discoveries, customer lists or other information of any nature
whatsoever which the HLBE has directly or indirectly created, discovered, or
otherwise acquired.


 


9.                                      SEVERABILITY


 


	
  /s/ Robert J. Ferguson

  	
   

  
	
  Robert J. Ferguson

  	
   

  



 


If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the remaining provisions will not in
any way be affected or impaired by such holding and the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(i) such provision shall be excluded from this Agreement, (ii) the balance
of the Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of the Agreement shall be enforceable in accordance with
its terms. All agreements and covenants contained herein are severable, and in
the event any of them, shall be held to be invalid by any competent court, this
Agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein.


 


10.                               EFFECTIVE DATE


 


This Agreement shall be effective as of the first day
of FERGUSON’S employment with the HLBE and shall be binding upon me, my heirs,
executor, assigns and administrators and shall defer to the benefit of HLBE,
its subsidiaries, successors and assigns.


 


11.                               CHOICE OF LAW


 


The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Minnesota.


 


12.                               BINDING EFFECT


 


The
terms of this agreement shall be binding upon the parties to this agreement,
their heirs, successors, assigns and legal representatives. Each party
acknowledges that, in executing this agreement, such party has had the
opportunity to seek the advice of independent legal counsel, 


 

















 


and
has read and understood all of the terms and provisions of this agreement. This
agreement shall not be construed against any party by reason of the drafting or
preparation hereof.


 


The
parties have executed this Agreement on the respective dates set forth below
and in doing so have read this agreement carefully and understand and accept
the obligation which is imposes upon them without reservation. No promises or
representations have been made to induce signature to sign this agreement. This
agreement is signed voluntarily and freely.


 


	
  /s/ Robert J. Ferguson

  	
   

  	
  2/1/2008

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Robert
  J. Ferguson

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  HLBE  Board of Governors

  	
   

  	
  Date